Changing Payroll List Item coding assignments impact

Updating the Payroll item list in QuickBooks Desktop can significantly impact your records, especially the historical data, @Deadwood Al.

Firstly, if the item already exists, we cannot create new tax items for defined Federal and State Taxes, as there can only be one item for each tax.

However, we can modify the accounts used for the existing tax items. When making changes, we can select whether to update the account used on existing transactions and how far back you want the change to apply.

In addition, you can make accounting adjustments to payroll items that will either have minimal or no effect or will impact all past transactions. 

Furthermore, please refer to this article to learn how to change the payroll items expense or liability account: Change an expense or liability account associated with a payroll item in QuickBooks Desktop Payroll.

Moving forward, for duplicate accounts like PTO Salary and Salary PTO, it’s best to wait until the end of the year to standardize and inactivate the redundant items. Doing this can help in maintaining consistency, which can help avoid confusion during the current year.

Also, since your company file is large and goes back to 2002, you might want to consider condensing the file or starting a new company file with the correct settings. QuickBooks Desktop offers a feature to Condense Data, which can help reduce the file size by summarizing older transactions.

Moreover, you can check out the articles below that can help you with your payroll:

• Customize payroll and employee reports
• Delete or void employee paychecks
• Create a payroll summary report

Let me know if you wish to learn how to make these changes in QuickBooks Desktop. Keep safe.

" ...you might want to consider condensing the file or starting a new company file with the correct settings."

We were recently told that QB does not allow 2 company files with the same FEIN, so we shouldn't try to create a new company. I thought that would be a simpler solution, but had the following issue/questions and never received detailed feedback from QB.

1 - To start a new company file, the easiest way would be to begin Jan 1 2025 after the last payroll had been ran in the current company file. However, the 4th Q 941. the 940, and the state reports would not be done at that time, and wouldn't happen until after the 2025 payroll had occurred. How would we avoid having two companies with the same FEIN in that instance? We would not be generating new (2025) payroll data in the old file, but we would need to use the old file for the employment tax reports.

2. We understand that we could use software (IIF or something like that) to transfer virtually all of the "lists" data to the new company, although we would need to update all of them with the new GL #'s. (Yes, we are going to correct years of bad structure in the GL!) But it so far is unclear how we would transfer the open AR and AP balances to the new system ... manual entry of invoices offset to ??? 

Are there documents that describe the process for loading the GL with prior company data? Surely this must have been addressed when QB gets new customers who have been on a different system, or when they want to start over with a new QB company file ....???

3. Could we load the closing data from the old (current) system into the new company file as we are using the new company file? 

We have been told that starting a new company file is more work than modifying our existing data ... merging accounts, eliminating existing account & sub-account structures, correcting all the 1099 flags, etc. To me this seemed like more work than starting over with a new company file, but since we haven't done either, we don't really know.

Is there a way to have two companies with the same FEIN? I understand not having them both open at the same time, but what if they were not open at the same time? Is it possible to run the year end employment tax reports out of the old system after the new year payroll has started in the new system?

Who do we contact via telephone to discuss these issues with a very experienced QB professional to get clear and straight answers?

I can share information about managing payroll and tax reporting while transitioning between QuickBooks company files and ensuring compliance with the IRS and state regulations, @Deadwood Al.

First, you can keep the old file active only for 4th Quarter reports and close it after filing. Do not process new payroll or transactions and ensure only one file is active. Use the old file for tax reports until the end of the year, then close it.

QuickBooks doesn’t support transferring open AR and AP balances via IIF files. Manually enter these balances by creating invoices for AR and bills for AP, using a "Transfer" or "Opening Balances" account to keep records organized. For lists like customers and vendors, we can use IIF files to import data into the new company file, updating GL accounts as needed. You can check this article for more information about importing IIF files: Export, import, and edit IIF files.

For your third question, Yes, you can transfer list data from your old system to the new QuickBooks file, but you’ll need to manually enter open AR and AP balances. Only one file can be opened at a time. Consider whether fixing existing data or starting fresh is easier for you.
 

To avoid sync issues we avoid using one FEIN for two company files. Transitioning to a new QuickBooks file is effective for compliance. Keep the old file open only for year-end tax reporting, then close it after filing. This lets you use the new file for future transactions, streamlining your financial management.

For further assistance, please reach out to our Support Team. They can offer additional information and address any concerns you may have.

Meanwhile, you can visit these articles to manage payroll items, and assign, and update pay schedules. 

• Manage payroll schedules. 
• Set Payroll preferences in QuickBooks Desktop Payroll.

You can always connect with me by clicking the reply button below. I'd be here to support you if you need further assistance managing your payroll item. Have a great day ahead!

@RogelioL  RE:

• Changing the Expense or Liability account associated with a payroll item will affect all previous Transactions linked to that item, which means that the historical payroll data will be reclassified under the new General Ledger (GL)codes.
• Example: If you update the payroll items for EE and ER Social Security Liabilities, FUTA Liabilities, State SUTA Liabilities, and Federal Income Tax Withheld, these changes will reflect in all past payrolls, including those in the current quarter.

None of that is correct. Have you ever actually tried changing the account on a payroll item to see what happens? I expect not.

Suggestion: Figure out how QuickBooks works before answering questions incorrectly, which is a disservice to customers and should be downright embarrassing, for both you and Intuit.